Measure’s modest amount of funding for infrastructure projects and clarification that PPP loans may not be taxed will help offset some of the challenges facing the construction industry.
The Associated General Contractors of America’s chief executive officer, Stephen E. Sandherr, issued the following statement in reaction to the release of compromise coronavirus relief legislation:
“The new coronavirus recovery measure announced today should provide some needed relief for a construction industry that is coping with project cancellations and job losses in most parts of the country. Most notably, the measure includes $10 billion in needed funding to help address the pandemic-induced shortfalls in state transportation revenues. This new funding should keep a number of road projects from getting canceled or delayed over the coming months. The measure also includes new funding for waterways, ports and other maritime facilities.
“Most important, the measure reaffirms the original Congressional intent that employers that used Paycheck Protection Program loans to save jobs will not be forced to pay more taxes next year as a result. Given that demand for many types of commercial construction projects is likely to remain soft in 2021, the administration’s plan to tax firms for their forgiven loan amount would have cost many construction jobs. Instead, the new recovery measure will preserve many of the original benefits of the Paycheck Protection Program, something our association has worked aggressively to ensure.
Construction Firms: Coronavirus Stimulus Package Details
This latest relief package includes targeted funding that could be helpful to construction firms in 2021:
Aid for small businesses
The agreement sets aside $285 billion for additional loans to small businesses under the Paycheck Protection Program, renewing the program created under the spring stimulus legislation.
- It caps loans at $2 million and makes them available only to borrowers with fewer than 300 employees that experienced at least a 25 percent drop in sales from a year earlier in at least one quarter.
- The agreement also sets aside $12 billion specifically for minority-owned businesses.
- The legislation sets aside $300 million for building out infrastructure in rural areas and $1 billion in grants for tribal broadband programs.
- It also allocates $35 billion to fund wind, solar and other clean energy projects.
